Washington D.C.--(Newsfile Corp. - April 24, 2017) - The Securities and Exchange Commission today announced fraud charges against a Massachusetts-based portfolio manager accused of diverting at least $1.95 million to his personal brokerage Account from a fund over which he had trading authority.
The SEC’s complaint alleges that Kevin J. Amell carried out a fraudulent matched-trades scheme in which he prearranged the purchase or sale of call options between his own account and the brokerage accounts of the fund at prices that were disadvantageous to the fund and advantageous to him. In one series of trades involving Amazon securities, for example, Amell allegedly generated a $23,000 profit for himself in less than 23 minutes at the fund’s expense.
“As alleged in our complaint, Amell abused his trading authority at least 265 times by matching trades between the fund and his personal account at prices that he intentionally and fraudulently skewed to benefit himself,” said Joseph G. Sansone, Co-Chief of the SEC Enforcement Division’s Market Abuse Unit.
In a parallel action, the U.S. Attorney’s Office for the District of Massachusetts today filed criminal charges against Amell.
The SEC’s complaint charges Amell with violating Sections 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c), and Sections 17(a)(1), 17(a)(2) and 17(j) of the Investment Company Act of 1940 and Rules 17j-1(b)(1), (3) and (4). The SEC is seeking disgorgement of Amell’s ill-gotten gains plus interest and penalties as well as injunctions.
The SEC’s investigation, which is continuing, is being conducted by Melanie A. MacLean, John D. Marino, and Simona Suh of the Market Abuse Unit and Elzbieta Wraga of the New York Regional Office. The case has been supervised by Mr. Sansone. The litigation will be led by Ms. MacLean, Ms. Suh, and Martin F. Healey of the Boston Regional Office. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts, the Federal Bureau of Investigation’s Boston Field Office, and the Financial Industry Regulatory Authority.